Best Life Insurance Companies

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It is essential for you to buy life insurance if you have a spouse, children, or parents who are financially dependent on you. It allows you to secure the financial needs of your loved ones and make sure that they can cope with the loss of your income – in the event of your untimely death.

What is equally important is choosing a reliable life insurance provider. Life insurance, by definition, comes into effect only when you are gone.

You have to trust the company to deliver on its promise of paying your family after your passing. So, the reputation and track record of the company you choose should be good enough for you to place your trust in them.

The 10 Best Life Insurance Companies

new york life logoNew York Life

It was established in 1845 and is currently the third largest insurance provider in the country.

A.M. Best: A++

Moody’s: Aaa

Standard & Poor’s: AA+

Fitch: AAA

Strengths: Offers a wide range of policies and riders.

Banner Life Insurance ReviewBanner

Banner was founded in 1949 and is based in Maryland.

A.M. Best: A+

Standard & Poor’s: AA–

Fitch: AA–

Strengths: Reasonable underwriting guidelines, high acceptance rate, and fast claim settlements.

prudential life insurance logoPrudential

It was established in 1875 and is one of the largest insurers in the country, holding active life insurance policies worth $2 trillion.

A.M. Best: A+

Moody’s: A1

Standard & Poor’s: AA–

Fitch: A+

Strengths: Lenient underwriting policies – accepts people older than 60, those who are not in perfect health, those with DUIs on their record, and those who chew tobacco.

aig life insurance logoAIG

AIG Life Insurance was founded in 1919 and has more than 90 million policyholders.

A.M. Best: A

Moody’s: A2

Standard & Poor’s: A+

Fitch: A+

Strengths: Financially stable, has a global presence, and has an impressive lineup of products.

mutual of omaha logoMutual of Omaha

It was founded in 1909 and is a Fortune 500 company.

A.M. Best: A+

Moody’s: A1

Standard & Poor’s: A–

Strengths: Financially stable, offers low rates even for those with minor health issues, medical tests are not required for select term policies.

state farm logoState Farm

It was founded in 1929 and is based in Illinois.

A.M. Best: A++

Moody’s: Aa1

Standard & Poor’s: AA

Strengths: Financially very stable, offers a great lineup of term and permanent life policies, and is known for its customer service.

transamerica life insurance reviewTransamerica

It was founded in 1928 and is headquartered in Iowa.

A.M. Best: A+

Moody’s: A1

Standard & Poor’s: A–

Fitch: A+

Strengths: High acceptance rate even for higher risk applicants, offers 30-term policies even for people over the age of 50, financially strong.

metlife logoMetLife

It was established in 1868 and is one of the oldest and largest insurance companies in the world.

A.M. Best: A+

Moody’s: Aa3

Standard & Poor’s: AA–

Fitch: AA–

Strengths: Simple application process, offers low-cost policies even for those with diabetes and high blood pressure, and also offers simplified issue policies that do not require medical exams.

lincoln logoLincoln

It was founded in 1905 and is based in Pennsylvania.

A.M. Best: A+

Moody’s: A1

Standard & Poor’s: A–

Fitch: A+

Strengths: Financially sound and has lenient underwriting policies.

haven life logoHaven Life

It was established in 2013 as a fully-owned subsidiary of Massachusetts Mutual Life Insurance Company, which has been in the insurance business for more than 160 years.

A.M. Best: A++

Moody’s: Aa2

Standard & Poor’s: AA+

Fitch: AA+

Strengths: Fast coverage and flexible policies.

Factors to Consider While Choosing a Life Insurance Company

Financial Ratings

This is, without a doubt, the most important factor you need to consider while looking for an insurance provider. Financial ratings are one of the key indicators of a company’s financial stability and its ability to meet its contractual obligations.

There are several independent agencies that rate insurance companies based on their financial strength – the most important ones being A.M. Best, Moody’s, Standard & Poor’s, and Fitch. Each agency has its own set of criteria to determine a company’s financial stability.

These ratings, however, change from time to time, depending on the company’s recent performance as well as its long term financial outlook. So, you should check the latest ratings of an insurance company before deciding if it is stable enough for you to do business with.

Track Record

You should check the company’s track record in terms of settling its claims. Does it have a long record of serving its customers well? Has it settled all or most of its claims in a timely manner without any issues? These are questions you need to ask to find out if the company is the right choice for you.

If the company has a history of sales misrepresentations, policy cancellations, and disputes over claim settlements, you have to think twice before choosing it, even if it’s policies happen to be very affordable.

There is simply no point in choosing a low-cost policy if the company has a history of stalling claim settlements.

Remember – your family has to file a claim with the insurance company after your passing to receive the death benefit. The last thing they need at such a traumatic time is for the company to make them jump through hoops to receive the payout. So, choosing a company with a positive track record is crucial.

You can find out about a company’s track record by checking with the Better Business Bureau and the National Association of Insurance Commissioners. You can also check with your state’s insurance department to find out the number of complaints filed by the customers against the company every year.

Range of Policies Offered

You should look for an insurance company that offers a wide range of policies for you to choose from, so that you can pick one that best suits your budget as well as your family’s financial needs.

Convertible Policies

Look for a company that allows you to convert a term policy into a permanent one. A term life insurance policy generally lasts anywhere from 10 to 30 years.

If you are in your 50’s or 60’s when it expires, you might need to get yourself insured again. Qualifying for a new policy at that age can be difficult, and even if you do, you might be charged higher life insurance rates compared to what a young person is likely to pay for the same policy.

With the conversion option, you can convert your existing term policy into a permanent one, without having to qualify for a new policy or undergo any medical tests. Even if you think that you might not need it, it is a good option to have.

Riders and Additional Benefits

Look for a company that offers plenty of optional riders and additional benefits along with its policies. A regular, no-frills-attached term policy is the cheapest option you could go for, but it may not cover all your needs.

What happens if you develop a terminal illness or a disability, which not only prevents you from working, but also has significant medical costs associated with it?

In such a scenario, a pure term policy is of little use, since your family can receive the payout only after your passing. In the mean time, you have to dig into your savings to pay for your treatment costs, leaving your family vulnerable in the short term. An accelerated death benefit rider can be extremely beneficial to your family in such cases.

The accelerated death benefit rider gives you the option of receiving a portion of your death benefit while you are still alive, in case you are diagnosed with a terminal illness. You can use the money to pay for your treatment without having to deplete your savings or borrow money from others.

Similarly, there are several other riders available for different scenarios like accidental death, disability, critical illness, waiver of premium, unemployment, and so on.

Choosing one or more of these riders will definitely increase your premium payments, but paying a few dollars more on a monthly basis is certainly worth the extra protection and the sense of security these riders provide.

Underwriting Policies

Each insurance company has its own set of underwriting policies or guidelines. Some companies have very strict guidelines, wherein you are likely to qualify for the Preferred or Preferred Best category (the lowest possible premiums) only if you are young and in excellent health.

If you have any risk factor – overweight, have a family history of heart disease, cancer, and other health conditions, high-risk occupation, extreme sports and hobbies, or smoking – you are likely to qualify for the Standard or Standard Plus category, in which the premiums are higher.

Some other companies, on the other hand, are slightly lenient with their underwriting guidelines.

So, even if you do not qualify for the Preferred or Preferred Best category with one company, you might be able to do so with another company. By doing so, you might be able to save hundreds of dollars in premiums alone every year.

This is why it is important to get quotes from multiple companies while buying insurance. Not all companies have the same kind of guidelines or medical test requirements. So, you should choose one where you are most likely to qualify for the best possible rates.

Traditional Insurance Companies vs. Mutual Insurance Companies

If you are looking to buy a permanent life policy, it is advisable to buy it from a mutual insurance company, rather than a traditional insurance company.

The difference between a traditional life insurance company and a mutual life insurance company is that the former is owned by stockholders whereas the latter is owned by the policyholders themselves.

This is why mutual insurance companies tend to distribute their surplus revenue evenly among their policyholders in the form of dividends.

If your insurance provider pays dividends every year, it could be an additional source of income for you throughout the term of the policy. This is above and beyond what you receive in terms of the cash component and the death benefit.

While this certainly should not be a make-or-break factor in deciding which company you should do business with, it can be an additional criterion based on which you can compare different insurance companies.

Why You Should Consider the Financial Rating of a Life Insurance Company

Among the factors mentioned above, financial rating stands out from the rest as it is the very factor that determines the validity of your contract with an insurance company. Think of it this way – life insurance is meant to be a financial safety net for your family. The net, however, is only as strong as the insurance company’s ability to honor its claims.

The Importance of Financial Stability

Insurance companies increase their profits by investing a portion of the money they receive from the policyholders in the market.

The market, by its very nature, is unpredictable and could go up or down depending on various factors. When it does go down, a company could suffer losses, albeit only in the short term.

During such times, unless the company is financially stable and has sufficient statutory reserves, it might struggle to continue its operations, settle claims, and pay for surrendered policies. This is why the financial rating of a company matters a lot.

Similarly, if there is a catastrophic event or there is a sudden drop in the market, people might panic and want to surrender their policies or withdraw money from their policies.

Such a sudden spike in surrender and withdrawal requests can only be handled by companies that have significant financial resources at their disposal.

Financial Rating by Independent Agencies

Independent agencies like A.M. Best, Moody’s, Standard & Poor’s, and Fitch rate insurance companies according to their financial stability.

These agencies analyze a company’s financial data – the amount collected in premiums, the amount paid out in claims, statutory reserves and assets, cash flow, return on investments, potential risks in the short term and the long term, and many more – before giving an appropriate rating.

If a company is rated highly by these agencies on a consistent basis, it is a very good sign of its financial strength and its ability to honor its commitments. Similarly, if a company receives subpar ratings from these agencies consistently, you should be wary of choosing it as your insurance provider.

Let us now take a look at 10 life insurance companies you should probably avoid.

Life Insurance Companies to Avoid

While the majority of insurance providers in the US are financially stable and committed to serving their customers, there are some companies that are notorious for denying and delaying claims and are rated poorly by customers and rating agencies alike.

Based on their track record, it is not advisable for you to trust them with your hard-earned money. Let us take a look at them now.

Colonial Penn

It was founded in 1968 and is based in Pennsylvania.

A.M. Best: A–

Moody’s: Baa1

Standard & Poor’s: BBB+

Fitch: BBB+

Why You Should Avoid It: Receives a large number of complaints from customers regularly and is known for delaying claims.

EquiTrust

It was founded in 1966 and is based in Iowa.

A.M. Best: B++

Standard & Poor’s: BBB+

Why You Should Avoid It: Has a subpar financial rating and offers policies that might only meet the needs of a small, niche group of customers.

Bankers Life

It was founded in 1879 and is based in Illinois.

A.M. Best: A–

Moody’s: Baa1

Standard & Poor’s: BBB+

Fitch: BBB+

Why You Should Avoid It: Not as financially stable as other, higher rated companies.

Baltimore Life

It was founded in 1882 and is based in Maryland.

A.M. Best: B++

Why You Should Avoid It: Subpar financial rating despite being in business for more than a century.

Allstate

It was founded in 1931 and is based in Illinois.

A.M. Best: A+

Moody’s: A1

Standard & Poor’s: A+

Why You Should Avoid It: While it is financially stable, the company is known to delay and deny claims at times. The premiums are also higher than average and the underwriting policies are strict, which means you are less likely to qualify for preferred rates if you have any preexisting condition or risk factor.

Choose the Right Life Insurance Company

Life insurance is an important long term financial decision, which you need to make after considering a number of factors.

If you choose to buy insurance from an unreliable company – just because the premiums are low or for any other reason – your family could end up paying the price in the future. So, you need to carefully consider the factors mentioned above and choose an insurance provider who is reliable, financially stable, and whose policies meet your needs.

How NoExam.com Can Help You

If you are in need of life insurance, but not sure what kind of policy is right for you or which company you should buy it from, we at noexam.com can help you.

We have all the information you need to understand the pros and cons of choosing different kinds of policies as well as the strengths and weaknesses of various insurance providers. We can help you find the right kind of policy and a reliable insurance provider for you to do business with.

Jon Fritz

Jon Fritz is a licensed life insurance agent at NoExam.com. Please see our complete guide to life insurance rates and learn how to choose the best life insurance policy.


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